TIGRAN SARGSIAN: 2007 WAS QUITE SUCCESSFUL IN TERMS OF MACROECONOMIC INDICES

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. A people, whose sons are not equal
before the law and death, will not have a victorious homeland, –
with these words of Garegin Nzhdeh the Armenian prime minister Tigran
Sargsian started his annual report on the 2007 state budget at the May
20 sitting of the RA National Assembly. He explained that beginning
his speech with the above mentioned expression is conditioned by the
fact that the number 1 problem of the government is to create equal
tax conditions, which is the only way to victory.

According to him, in this respect 2007 was an exceptional year as it
was for the first time that the government succeeded in increasing
sharply the tax collection. The state budgetary revenues grew by 33%,
with the taxes/GDP ratio growing by 1.6%. T. Sargsian underlined
that this is an unprecedented growth for Armenia because in 2006 the
same index made only 0.2%. He said that the government realizes that
the progress made in 2007 is still insufficient as serious problems
in terms of improving the tax and customs administration have been
revealed. In particular, in 2007 it was revealed that considerable part
of taxes was collected in the form of indirect taxes and the share
of direct taxes in the total amount of taxes declined as compared
with 2006. Like in the previous years, in 2007 imports grew rapidly,
which allowed to increase budgetary revenues at the expense of VAT
charged on the border.

T. Sargsian said that the 2007 macroeconomic indices were quite
impressive and at the same time obliging as a 13.8% GDP growth was
registered in 2007 and the government finished the year with 6.6%
inflation. In his words, when comparing Armenia with other CIS
countries, it can be stated that 2007 was quite successful in terms
of macroeconomic indices, which puts serious tasks for the government:
to ensure the tendencies achieved.